Article 5. When the present Charter enters into force and the Executive Council is constituted, the latter shall elect its first President by drawing lots. IN WITNESS WHEREOF: The Ministers of Foreign Affairs of the Central American Republies sign this document in the city of Panama, Republic of Panama, on the twelfth day of December, Nineteen Hundred and Sixty-two, For Costa Rica: DANIEL ODUBER QUIROS 2. Central American Common Market (CACM) a. Description Established in 1960 under the aegis of the Organization of Central American States (ODECA). MEMBERS 1 Cost Rica Guatemala El Salvador Honduras 1 Nicaragua ORGANIZATION CENTRAL AMERICAN ECONOMIC COUNCIL (Consejo Económico Centroamericana-CEC) Created by the General Treaty of Central American Economic Integration, the Council consists of the Ministers of Economy of the member states and meets as often as necessary or at the request of one of the contracting parties in one of the five capitals. EXECUTIVE COUNCIL (Consejo Ejecutivo del Tratado General-CE) Consists of one government delegate and one alternate from each member state. Meetings are convened by the Permanent Secretariat or at the request of the contracting parties. Its function is to implement the measures necessary for the fulfillment of the terms of the General Treaty, which provides for the gradual realization of a Central American Customs Union. PERMANENT SECRETARIAT (Secretariat Permanente de Integración Económica Centro americana-SIECA) The Permanent Secretariat was set up as the administrative arm of the Economic Council and the Executive Council. It supervises the correct implementation of the legal instruments of economic integration and carries out relevant studies. BANCO CENTROAMERICANO DE INTEGRACIÓN ECONÓMICA (BCIE) (Central American Bank for Economic Integration) P.O. Box 772, Tegucigalpa, Honduras; f. 1960, started operations 1961; capital $60 million; available resources, including loans $249.3 1 Honduras still regards itself as a de jure member of CACM, although it suspended participation in the common market in December 1970 by imposing tariffs on all imports from the region. NOTE. Reproduced with permission of The Europa Yearbook, 1972. Vol. I. London, Europa Publications Limited, 1972. million; to finance public and private development projects, particularly relating to industrialization and infrastructure. Meeting of Board of Governors, January 1969, decided to increase capital subscription of Bank to $60 million, to be contributed in equal parts by each member country. Publ. Annual Report, Revista de la Integración. Up to the end of December 1969 the BCIE had granted loans amounting to U.S. $193 million, which were allocated as follows: Country Guatemala El Salvador Nicaragua Costa Rica Total_____ Percentage of total 16.90 20.09 24. 42 20. 11 18.48 100.00 FUNCTIONS The Central American Common Market was established under the Tratado Multilateral de Libre Comercio e Integración Económica Centroamericana and the Tratado de Integración Económica Centroamericana. It visualizes the eventual elimination of all tariffs and barriers between members, and the establishment of a common external tariff for the rest of the world. So far practically all internal barriers have been removed and agreement has been reached on 98 per cent of the items in the regional customs classification; uniform tariffs now apply to 87 per cent of these items and the others are to be equalized over a five-year period. Intra-regional trade has increased from $34 million in 1960 to $275 million in 1971. It is expected that there will be a common customs administration by 1970 and further goals include a unified fiscal policy, a regional industrial policy and co-ordinated regional policies in public health, labour, education, transport and agriculture. CENTRAL AMERICAN INTEGRATION 1952 Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua established the Central American Economic Co-operation Committee (CCE) to: 1. Establish a common market. 2. Integrate industrial development. 3. Co-ordinate their agricultural economies. 1954 Establishment of Central American Advanced School for Public Administration, San José, Costa Rica. 1956 Establishment of Central American Research Institute for Industry (ICAITI) in Guatemala City. 1958 Agreement on the Central American Agreement for Industrial Integration signed. Multilateral treaty on Central American Free Trade and Economic Integration signed, providing free trade for products representing one-third of inter-Central American trade. 1958 Studies of problems of roads, railways, shipping, air transport, finance, weights and measures, statistical co-ordination and demography. Panama became a member of the Central American Economic 1959 Draft agreement drawn up for the establishment of a customs union. Proposals for (1) establishment of a telecommunications center, (2) juridical unification, (3) common marketing information, (4) central tourist organization. 1960 General Treaty on Central American Economic Intergration signed between El Salvador, Guatemala and Honduras, aiming to establish a Central American customs code and uniform tariff legislation. 1961 Central American Bank for Economic Integration (BCIE) set up. Equalization of import duties completed for 90 per cent of the items to be subject to the Common tariff. Central American Uniform Customs Code was drafted. 1962 Costa Rica acceded to General Treaty. Equalization of import duties extended to 95 per cent of the Central American Agreement on Tax Incentives to Industrial 1963 Signing of Protocol to the Regime for Integration Industries and the special system pertaining to tariffs for the promotion of production activities. 1965 Ministers of Economic Affairs agree on a Central American policy for investment. 1966 Decision taken on special treatment for the balanced development of Honduras within the integrated economy. 1969 Decision by Governors of Central American Bank for Economic Integration to set up a Guarantee Fund with a capital of $40 million, to be subscribed entirely by members of the Bank. Signing of agreement establishing the Central American Fund for Monetary Stabilization. 1970 Recommendation by the Consejo Monetario Centroamericano to increase reciprocal credits granted through the Cámara de Compensación Centroamericana with a view to improving the positions of Honduras and El Salvador in particular. December: Conference to decide modus operandi for CACM. On collapse of conference Honduras imposed tariffs on imports from the region. 1971 June: Costa Rica imposed tariffs on imports of textiles, shoes, clothing, soap and eggs from Central America. Costa Rica later lifted tariffs. October: Preliminary agreement reached in Guatemala on formula to allow free trade in clothing and eggs. INSTITUTIONS UNIÓN MONETARIA CENTROAMERICANA (Central American Monetary Union) Banco Central de Reserva de El Salvador, San Salvador, El Salvador; since 1952 the Central Banks of the five Republics had been meeting to discuss monetary, exchange and credit aspects of their respective economies. In 1961 the Central American Clearing House was founded. An agreement for the establishment of the Central American Monetary Union became effective for the five Republics in March 1964. COMITÉS DE CONSULTA O DE ACIÓN (Central American Monetary Council) Composed of the Presidents of the Central Banks of El Salvador, Guatemala, Honduras and Nicaragua and the Manager of the Central Bank of Costa Rica. COMITÉS DE CONSULTA O DE ACCIÓN (Consulting and Working Committee) Comité de Política Monetaria (Monetary Policy Committee). Comité de Política Cambiaria y de Compensación (Exchange and Clearing Policy Committee). Comité de Operaciones Financieras (Financial Committee). Comité de Estudios Jurídicos (Juridical Studies Committee). The Monetary Council will create other committees as it becomes necessary. SECRETARIA EJECUTIVA (Executive Secretarial) Its functions are to prepare the technical studies which may be necessary, and to co-ordinate the activities of the different committees. Rotative seat, at present in San José, Costa Rica. CÁMARA DE COMPENSACIÓN CENTROAMERICANA (Central American Clearing House) Tegucigalpa; f. 1961 and joined Central American Monetary Union in 1964; capital $10 million; operations 1968 $222.6 million; banking operations based on the Central American peso, at par with the U.S. dollar. FEDERACIÓN DE Cámaras de COMERCIO DEL ISTMO CENTROAMERICANÓ (Federation of Central American Chambers of Commerce) f. 1961; for planning and co-ordinating industrial and commercial interchanges. Rotative seat, at present Guatemala City, Guatemala. |